The worlds largest TV broadcasting show, NAB, opened in Las Vegas this week with NAB’s EVP for Communications, Dennis Wharton, calling 2014 a “pivotal moment in broadcasting’s history”. He quoted four game changing issues to make his point: Aereo; retransmission consent; spectrum auctions; and radio re-performance issues. I would not disagree with Dennis that this is indeed a pivotal moment for the industry. However, the real issues facing the industry go far deeper and are far more radical than those quoted above. For almost 80 years, TV has been structured as a vertically integrated market. Broadcast TV networks have commissioned and financed content creation, distributing the output in a linear framework, the TV channel. Those channels were broadcast on specifically formatted terrestrial transmissions to bespoke receivers. In this world, production costs were high, and a terrestrial broadcast licence was a scarce and valuable asset that conferred significant competitive advantage on the owner. Over the last twenty years, the costs of content production have fallen dramatically. The number of alternative content distribution methods (satellite, cable and latterly online) has increased significantly and distribution costs have fallen. As a result, content has become abundant, with multichannel TV almost ubiquitous in the developed world and internet delivered TV increasingly popular. Indeed, at 29 million, Netflix has the highest number of subscribers of any TV service in the western world (pre completion of Comcast’s Time Warner Cable acquisition). Despite these major changes, the long predicted demise of the traditional TV industry has never quite materialized. Indeed, viewing figures for traditional linear TV have proved remarkably resilient to the attempts of on-demand internet video, mobile communications, and social media to dis-engage consumers from our TV screens. The traditional TV industry has been shaken, but not yet stirred. However, I do believe the time has now come where the relationship between the viewer and traditional linear TV channels is about to break down. Three factors converge to undermine today’s broadcast TV business:

The increasing challenge users face in finding content they actually want to watch

The emergence of “multiscreening” – simultaneous use of mobile (smartphones and tablets) while “watching” TV

The move of OTT players into content production

Program search With todays electronic program guide (EPG), viewers today are faced with the task of paging through hundreds of channels that have to be searched in order to find something interesting to watch. Attempts have been made to increase the utility of program search through pictorial “cover flow” on-demand services. However, those experiences still present the viewer with limited choice and long search times. These processes, based around the use of the TV remote, are now beyond the tolerance of even the most patient of viewers. What’s more, as the range of choices increase, the long tail of poor quality content increases disproportionately making search even more challenging. TV-based content search is no longer fit for purpose. The rise of “binge” consumption – watching whole series of programs at once – speaks in part to the challenges users face in finding content they like. Increasingly, users identify with a series - NCIS, Game of Thrones, House of Cards - rather than the channel that is showing those series. Increasingly, the user is using tools available outside the TV to find the content they want to watch. The main tool they are turning to is the mobile device (smartphone and tablets). The mobile is enabling the user to more easily curate their own content, a historically played by the TV channel. As users use mobiles to make choices based on series rather than channels, power is shifting away from the channels towards content producers. And as content search transfers to the mobile, traditional broadcasters lose one of the traditional broadcasters key USPs – a position at the top of the EPG. Multi-screening According to Ofcom’s Communications market report, 2013, over half of TV viewers in the UK now use their smartphone and/or tablet while watching TV. NBC reports similar numbers in the US. Most research still suggests users remain engaged with what is going on on TV while tweeting to their friends or checking out who’s saying what on Facebook. However, users clearly seek to multitask while watching TV. What is more, the accelerating adoption of tablets (UK penetration doubled to 24% in 2013) has dramatically accelerated the scope of multiscreening. Over 80% of tablet owners are likely to multitask with other media while watching TV. Hence, there is clearly a need for the TV industry to seek to provide a mobile component to the TV viewing experience, whether that be content search, social media, or enhancements to the program they are watching. The challenge for traditional broadcasters is that this is not natural territory for them to occupy. Device control and content search is a cross-content function more naturally handled by equipment manufacturers or platform operators. Social media is the domain of …. well, social media players (as attempts to date to aggregate social media and content control in one app will testify to). It’s only in providing franchise or content specific apps that the broadcaster has a natural opportunity to add value and engage audiences effectively. The OTT threat

Lastly there is the ever growing threat of competition from OTT players. After many years of developing their services based on back catalogue content, Netflix, Amazon, Microsoft and Yahoo have all now started to invest in original premium content to attract consumers. This is perhaps the most significant issue for the TV industry. Users are for the first time buying an OTT service to get access to NEW premium content experiences, not just to relive old ones. That is precisely the principle on which satellite and cable platforms have attracted paying subscribers over the last twenty years. Taken together, these trends threaten to further accelerate control of the TV experience from the TV to the mobile device, and in so doing encourage rapid adoption of OTT services that provide original content. While this may not switch viewing away from traditional channels overnight, it will accelerate audience fragmentation and shift power towards both OTT players and content producers.

Long live the program maker. So how should traditional broadcasters react? Clearly the TV channel will not disappear overnight. The traditional industry has time to react. However, broadcasters must start now to make serious efforts to re-shape themselves for the inevitable changes that are being brought by the internet age. At a time of major market disruption, an organisation needs to look at itself and understand what its core mission and purpose is. What is its USP? What is its core competence? How does it add value to the consumer? The new world of internet distributed and mobile controlled content is a world where the quantity of available content is high but quality content is scarce. In this world, quality and premium branding will out. Brand presence backed by quality programing will be essential to engage consumers. This plays to one of the key strengths of the traditional broadcaster - content commissioning and creation. Broadcasters need to unhook themselves from the means of distribution, reshape how they finance, aggregate and curate content, and seek to deliver a service that is excellent across all distribution channels, including in particular smartphone & tablet. It also means reducing reliance on EPG positioning to secure audiences, and focusing on the development of a presence on App stores and other online market places. Others will be seeking to occupy the same space. Over time I fully expect that the distinction between major production houses and network channels will be lost. Both will be financiers of content. Both will offer content direct to the market through the content search and discovery interfaces of tomorrow. However, the alternative for the broadcaster is that they go the way of other traditional industries – print media, music, and increasingly the mobile network operators themselves – consumed and supplanted by Internet giants and other, more nimble, “Over The Top” players.

I have roughly 200 apps on my phone spread across five pages and ten folders. By default, I enable notifications on the basis that if I have downloaded the app, its because it is doing something useful or interesting for me. Same thing on my mac. However, with this number apps it seems that every minute of the day my iOS devices notify me of new emails, new SMS’s, tweets, Facebook posts, new “friends” who have joined Tango, news stories from the BBC and Bloomberg (what possessed the BBC to add audio to their notifications!?), offers on games (my son insisted I download Avengers Assemble!), Pizza Hut offers, even the GSMA … the list is endless. Of course I have a choice –switch off all notifications app by app. But this reduces the utility of the app, and how many of us have the time to go through our list of apps and work out which apps I want to interrupt me and which I want silenced? So what’s the answer? The mobile user experience conference, MEX14, last week, provided a fascinating insight into how we respond to the stimuli presented to us by our digital devices. Giles Colborne of CX Partners quotes three timing principles UX designers need to consider when designing apps:

0.1 seconds – the minimum length of time we can discriminate. If an app responds to an action within 0.1 seconds, we perceive it as instantaneous.

1 second – the comfortable length of pause in a dialogue that we still consider to be natural speech

10 seconds – the amount of time to take to switch from one task to another.

This last figure explains why we find notification so irritating. If it takes me10 seconds to focus my attention on a Facebook notification then 10 seconds to re focus back onto writing this blog, I have just lost 20 seconds of productive activity. If I get one notification every three minutes, I am losing over 10% of my time to just switching between tasks. That's not just a problem for me. Its also a problem for the advertising industry. In particular, it's a problem for TV advertisers in this age of the second who account for around $100bn of the $240bn spent on advertisting in the US and Europe. If an advertiser loses the attention of the user to a tweet during an ad break, it takes at least 20 seconds or two thirds of the 30 second slot, before you get that user’s attention back again. That is a direct loss of value for your advert. As the number of apps and amount of app traffic grows, so the more notifications increase, and with it the probability of any one ad being interrupted. Apps need to get smart. They need some form of context awareness through which they can adjust what is notified to the user and when. The notification systems devised by Google and Apple are crying out for a fundamental re-think. At MEX we identified five major contexts or “modes” that we as individuals operate in (There are many more.):

Entertainment, (e.g. I’m watching TV)

Inspiration, (I’m deep in thought)

Operational (I’m at work standard working tasks),

Social (I’m out and about and want to chat)

Travel (e.g. I’m commuting)

We identified key characteristics defining each mode, and started to design principles describing what is appropriate to notify a user in each mode and when. Evolving this approach further, cognitive learning algorithms can be defined around the sensors on our devices to enable the system to detect the mode we are in and change our response to individual situations. Google Now is an excellent start down this route. The ultimate goal must be to enable users to engage more effectively with the digital ecosystem in what is currently a noisy and distracting environment. Engagement times user base is the key value metric for todays internet stocks. Facebook paid $40 per user for Whatsapp based on 450m people using the app more often than any other app on their phone. Line, a close competitor to Whatsapp, generates $12 per user per annum in revenue from its app in Japan. That compares to $7 per user Facebook generates per annum. Facebook is clearly paying for premium engagement. Right now our appreciation of how notifications from multiple apps diminishes engagement on our phones, tablets, laptops, and TVs is incredibly basic. Our understanding of how that translates into lost value for the brands that fund large chunks of the internet is even poorer. This is a massive issue that is fertile ground for research and innovation … and value creation.

With yesterdays USD16bn takeover of market leader Whatsapp by Facebook and last weekends USD900m sale of Viber to Rakuten, I thought it would be appropriate in this first issue of the second edition of my blog to consider why successful and apparently rational internet majors are buying up chat apps. These transactions are rich by any measure. Facebook has paid perhaps 40x revenue in the case Whatsapp. Ratuken has paid a reported 600x revenue in the case of Viber.

Having built their businesses on the PC, the internet majors are now looking to position themselves to deliver online commerce in a word increasingly dominated by mobile. As, in the words of Benedict Evans, “Mobile eats the World” , none of the majors who have grown up on the PC can afford to sit on the sidelines as the mobile retailing experiment that is chat plays out. That experiment is discussed in detail below.

Facebook and Ratuken have fired the starting gun on chat app M&A. Who will follow them, and how those services evolve will be a major industry theme for 2014.

2013, a year of dramatic chat app growth

Chat apps have had a pretty spectacular twelve months, rivalling Candy Crush (King) and Clash of the Clans (SuperCell) as the online theme of 2013.

In December 2012, Chat rose to the surface of general consciousness when Informa and the UK’s Financial Times announced that chat traffic had for the first time exceeded SMS. At the time, the leading market players had around 150m users each with perhaps an aggregate 1 billion downloads in total across the segment. Today, the four leading players alone - Whatsapp, LINE, WeChat and Viber - have amassed collectively over 1.4 billion users. A raft of other significant players including Facebook Messenger (now presumably to be wrapped into Whatsapp), Skype, and Snapchat take that figure well over 2bn downloads (Note that on average chat users use three apps each). San Francisco online researchers, Flurry Analytics, reported that, at 203% year on year in 2013, messaging usage was the fastest growing of any mobile app category.

However, as any internet entrepreneur and their backers will testify, growth in user numbers is a necessary but insufficient condition for success. What is also needed is user stickiness and (ultimately) a good monetisation strategy.

Signs of stickiness

What peaked the interest of Facebook and Ratuken is the level of engagement users have with their messaging apps.

It is clear from a number of sources that good messaging apps are very heavily used:

63% of those surveyed use their apps more than 10 times per day, more than voice, email and even SMS.

Research by Tomi Ahonen in “Communities Dominates Brands” suggests messaging is used more than any other service on your phone.

Intuitively, this level of engagement makes sense. We are at heart social animals (as Facebooks USD 170bn market cap can testify). Make it easy for us to interact with those closest to us, and we will be drawn back time and again to that app.

Monetisation: Chat Platform vs Pure Chat

The frequency and nature of our interaction with chat apps represents a massive opportunity to engage users in other services and activities that users may be interested in. If an organisation is able to tap into this level of engagement, use it to offer users more of what they want – and hang onto their users in the process - then the opportunity to monetise that engagement is massive.

So far, two organisations - LINE and KaKao Talk – stand out in their ability to monetise their chat communities. Both companies have essentially created “Chat Platforms” - apps and APIs that enable their own developers and third parties to offer a range of games, content, sponsored social feeds, and other apps around the core chat service.

This model has proved extremely successful for LINE who generate approximately USD 12 per user per annum from their Japanese subscriber base. This level of success has attracted a growing number of businesses including global brands such as Coke, MacDonalds, and Barcelona as well as a host of local companies looking to engage with the community. With the recent launch of music services, and an in-app app store, LINE is also looking to expand the platform model considerably.

Kakao has achieved similar results in Korea through an almost identical strategy, generating roughly USD6 per user per annum. With Facebook itself achieving around USD 7 per monthly active user across 2013, those are numbers that are clearly meaningful to Facebook were they to replicate them globally.

However, outside of Japan and Korea revenue generation from chat apps has to date been minimal. Intuitively there would appear to be no reason why users in other markets would not want to interact with relevant content in a similar manner - albeit with content reflecting local tastes and culture. We are all made from the same DNA after all. Tantalisingly, the OnDevice survey suggests that users in other markets are starting to warm to this model. But to date, actual monetistion has been very poor.

The alternative view is that the messaging app should remain pure and unadulterated by “distractions”. Chief amongst the exponents of this view is, ironically, Whatsapp, who as an independent entity, shunned content and advertising and instead charge a portion of their users USD1 per annum for the service. Their leadership of the segment, confirmed in the OnDevice survey, is strong evidence that “keeping it clean” works.

More Chat Platforms will emerge in 2014 ..

I believe it is highly likely that the acquisition of Viber and Whatsapp by two players adept at monetisation of online properties will see those players looking to make the Chat Platform concept work outside of Asia. In particular, Facebook’s knowledge of a users social graph places them in an outstanding position to offer chat users relevant content and connections. The maturity of their API and the app ecosystem they have built up are tailor made to be extended to the Chat Platform concept. Judging from the performance of LINE and KaKao Talk, its perfectly conceivable that Facebook could double revenue per user through the monetisation of chat... and more acquisitions are inevitable The inexorable shift of online to mobile and the engagement users have with chat apps had already raised interest in chat communities. Facebook’s move yesterday has dramatically increased those stakes. Regardless of whether you believe in chat monetisation or not, the potential costs of being late to the party and missing such a potentially tectonic shift in the monetisation of the mobile internet landscape is simply too great for other major internet players to ignore. A billion dollar acquisition of one or more of the remaining chat apps is now an essential bet for the likes of Google, Amazon, and Yahoo! to place. Mike Grant

Disclosure: Mike Grant is a shareholder in Myriad Group AG, a provider of chat apps to emerging markets.

So last month it was “Nokiasoft”, this month its “Microskpe” .... or should it be “Mickiaskype”??? The names may be convoluted, but the underlying theme of “Connecting Everything” is a very real goal. The question is how far do we as consumers want companies to go in trying to make TV, social, voice, and the myriad of other services we use easy and seamless to access across multiple devices? As regular readers of this blog know, it’s a question I’ve been pondering over for some time – not just how far should companies go but how far can they go, particularly the consumer giants that are driving the current wave of convergence. On June 8th and 9th, the Open Mobile Summit, produced by my good friend Robin Batt, will take place again in London (www.openmobilesummit.com). This year’s theme appropriately is “Connecting Everything”, and the day 1 keynote is Stephen Elop, CEO of Nokia. I, like many, am keen to hear his views on how Nokia and Microsoft plan to execute their convergence strategy, and in particular where Skype fits into this picture.

The $8.5bn spent by Microsoft on Skype is a pretty major statement of the value Microsoft sees in a 170million user ecosystem as the core of its future cross device communications strategy. The deal has sent media hacks into a frenzy again, variously describing it as inspired, overpriced, and fraught with execution risk.

For once I have to agree with the general tone of most of the commentary. The deal is in principle a great fillip to Microsoft and Nokia's ambitions to be a major cross platform global force. It provides them with both a software platform, and crucially a sizeable network of users around which to build tomorrow's mobile voice services. While the marginal cost of carrying voice over today’s mobile networks is considerably lower than the retail price, an installed base of handsets designed to deliver voice only over circuit switched networks sustains high voice margins for mobile operators. However, as we move to 4G LTE networks, structural reasons to keep voice separate from other forms of data will disappear. At some point therefore, a seamlessly integrated VoIP client and all inclusive unlimited voice minutes at a flat monthly rate becomes inevitable. At that point, Skype's service and user community should be a key asset for a “Mickiaskpe” to exploit.Skype has also built a very useful foothold in internet TV, a key target for Microsoft and it's partners. Again, potential exists to build out rapidly from this substantial beachhead in the landgrab that is the convergent media space.Much has been said regarding Microsoft overpaying for Skype, and the numbers surrounding the deal make that position an easy one to argue. However, the truth is we will only know some years down the line whether the deal was worth the money or not. Mark Volpi, ex CSO at Cisco, recently made the point on Gigaom that the valuation of a deal of this type is less important than the option value. As any VC or M&A exec will tell you, 2 in 10 acquisitions will succeed big. When they do the initial valuation price is inconsequential. As ever, it will be Microsoft and Nokia’s ability to execute that will be key to value creation. Successful execution will mean integration of the Sype community with Windows Live and Hotmail followed by consistent and rapid deployment across mobile, tablet and TV platforms. Hence, Stephen Elop’s view on Skype and the speed with which the Skype client will be seamlessly integrated into Windows Phone 7 and on into Nokia handsets will be a interesting pointer to the likelihood of the deal being a success.

It takes only a glance at any industry blog or trade magazine to realize that connected TV is the key industry talking point in 2011. With column feet of comment and analysis, and manufacturers falling over themselves to offer any sort of proposition with the “Internet TV” label, it’s easy to dismiss this trend as hype. How can the simple act of changing a one-way broadcast TV service into a bi-directional interaction alter the nature of a multibillion dollar industry that’s been the bedrock of home entertainment for nigh on 60 years?

Recently, I visited my friends at Redshift Strategy, where CEO Stephen Taylor has assembled a demonstration suite of connected TV products. Most of these products have still to launch in Europe, and so, like many who have crossed Stephen’s door in the last few weeks, it was my first opportunity to experience the joys of Logitech Revue, (their current Google TV offering), Roku, Vudu, Samsung’s Internet@TV, and a range of other similar offerings. An hour later we were still pouring over the structure and nuances of the first product we looked at, Logitech’s Google TV box.

After the struggle at CES with Google pulling products from the show at the last minute, I was expecting to see a poorly implemented mash up of a PC screen on a TV with few coherent and compelling services. Logitech’s product is still rough around edges, but it demonstrates clearly why every organisation in the industry needs to sit up and take notice of connected TV.

Google TV is an overlay box, which means it takes as an input the output from a standard cable, satellite or DTT service and renders its own menus, search screen and apps on top of that service.

The seamless manner in which linear and internet worlds were integrated on the one screen was extremely compelling. Switching between standard TV (in this case Sky HD) and the internet TV menu is simple and slick. With linear TV front and center you are unaware that Revue is sitting underneath it. At the press of a button, the entire EPG - including picture in picture of the channel you have selected – is itself reduced to a picture in picture. You are then presented with an intuitive, iPhone style internet apps menu with the opening page consisting of a search option plus eight apps. Search on any term – film or series title, actors name, producer – and you are presented with choices from across both linear TV and online apps providers such as HBO, New York Times, or YouTube. One click and you jump straight to the chosen content or application. Add in the use of a mobile or tablet as an integrated, synchronised companion screen (something that’s still to come for Logictech), and searching becomes even easier. The companion screen will also allow multiple viewers in the one room to personalize that viewing experience, or engage with other viewers or program makers on Twitter or Facebook.

These capabilities will undoubtedly enrich the experience for users, providing greater choice and easier access to a wider range of content. The ability to seamlessly access popular internet services will also be welcomed.

For broadcasters and program makers, direct access to real time audience conversations and feedback around a program will shape production processes, opening up for example opportunities to change storylines or influence character development from week to week. The opportunity to present out-takes or alternative camera angles to consumers on companion screens will add another dimension to the user experience.

However, as creative complexity increases, so inevitably will costs. Production costs will rise as the complexity of the process increases. Distribution costs will also increase as output formats proliferate to match the wide variety of device specifications that will appear from manufacturers. Online video distributors today have to create 30+ versions of content to satisfy consumers using different Set Top Boxes, PC’s and a small number of mobile phones. Expect this variability to rise by at least an order of magnitude as new connected TV boxes and companion devices come to market.

Most significantly, increased choice will fragment audiences further, reducing revenues to individual broadcasters and program makers. Competition for the attention of the consumer will become increasingly fierce. In particular, the battle between platforms, broadcasters and third party apps providers to be on the default screen when the box is turned on will be intense.

Brands will become increasingly important as consumers start to explore this new world. Consumers will naturally migrate to the channels and franchises they are most familiar with, giving existing broadcasters and platforms a head start in this market. However, if a brand fails to adapt quickly to this new ecosystem and exploit its potential, consumers will very rapidly move on. The need to adapt quickly to rising costs, increasing competition and falling revenues will be the core challenge for the industry. Retaining the attention of the consumer is core to revenue generation. To do this in a connected TV world, broadcasters and program makers will need to look away from the traditional schedule and focus instead on understanding and responding to how consumers are interacting with content in all its dimensions – large screen, small screen and in conversation. That in turn will require a fundamental change in culture, processes, and behaviour.

Impasse over online video standards is one piece of a bigger picture

Mashable recently produced an excellent commentary on the on-going battle over video codec support in HTML5 http://on.mash.to/dNezlE. A few days ago, Google quietly announced that it will stop supporting for the widely used H.264 codec schema (MPEG4 part 10) in HTML5 as implemented in Chrome.

Esoteric as this topic may sound for many, it’s a decision that sets Google on the path to war with Microsoft and Apple over the future of web video. HTML5 is widely seen as the software platform on which true service convergence across multiple device types from multiple manufacturers can be most easily and economically supported. Appropriately designed, it should be possible to use the same standards, code and content formats for an application delivered to phones, tablets, PCs and TVs from multiple manufacturers. Hence, in order to have a world where consumers can make separate choices over device supplier AND entertainment provider, it matters hugely who prevails in this debate.

Google’s stated reason for dropping H.264 is that it is a proprietary technology controlled by the MPEG LA, a firm that licences patents for a price. Its own alternative, WebM, is royalty free. On the face of it, Google’s decision to support the lower cost option would appear to be good news for content producers and distributors.

However, the broader context of this move warrants closer scrutiny. In addition to owning the organisation responsible for managing the development of WebM, Google has also recently acquired Widevine, widely regarded as one of the most appropriate and capable DRM systems for online video streaming. Hence, the company has control of two major pieces of technology that determine how web distributed video content is encoded and protected. Google also control Android, fast becoming the dominant OS in the smartphone market and about to break onto the connected TV scene with almost certainly similar impact.

As a result, Google is quickly piecing together control of all of the key software elements required to deliver a large scale video entertainment service on mobile phones, tablets, and, most importantly, the TV screen.

Should Android become the de facto software environment for devices within the connected home, the decisions Google makes regarding the future evolution of the platform, what technologies to support and what not to support, and how to monetise content on those platforms become key determinants of the future success of OEMs, broadcasters and studios alike.

How might Google use this position? A key question exercising the TV industry is how the advertising market will evolve in a connected TV environment. Apple’s iAd service demonstrates very effectively how content and advertising can be brought from two different places and integrated seamlessly on the device within an app. In the iAd case, advertising is delivered from Apple’s third party platform, independent of the content producer.

Extend this concept to the connected TV (or set top box) and this capability represents a major threat to broadcasters delivering content to any broadband connected device. Google will have the power to monetise a TV advertising opportunity completely independently of the broadcaster. Consider the following scenario: American broadcaster ABC seeks to deliver content to a Sony connected TV based on the Google TV software platform. The user selects the CBS player catch-up app. However, recognising what type of app it is, the device requests a 30 second pre-roll ad from AdMob (another Google company) and serves this to the screen before launching the ABC catch-up app.

Extend this process to the selection and play out of individual programs from individual broadcaster catch-up services, and the potential exists for either Google or some other third party who controls the device to create on the fly at the device a “channel” complete with adverts based on linear content made available via broadcaster catch-up services. What is more, this whole process can be done without the knowledge or consent of ABC.

There will of course be checks and balances that are likely to prevent a platform owner from completely eliminating a broadcaster from the revenue stream as we see with current platforms today. However, it is quite conceivable that as Google TV’s share of the connected TV market grows and as its dominance of the software used to create and deliver the user experience increases, so broadcasters and studios will be “encouraged” to adopt Google’s device based TV advertising platform to provide a better and more personalised advertising experience to users within their mainstream TV programming. This will be in return of course for 30% of TV advertising revenue. It is this prize – a significant piece of the TV advertising market - that Google is ultimately seeking. At present, Zenith Optimedia estimate that the global TV advertising market is worth USD 180bn out of a total USD 443bn. This compares to an internet ad market of USD 70bn. Today’s battles between Holywood studios and companies such as Apple and Netflix over control of online and mobile video distribution are only a precursor to the battle for the bigger prize. As I’ve said previously, control over content rights and over the user’s device itself will be key. The recent purchase of NBC Universal by Comcast is just the start.

Welcome to a new blog on the changes in mobile, media and the services and devices that are defining the converging worlds of telecoms and media.

For over twenty years, I have been fascinated by the power of technology - and in particular mobile technology - to enhance and influence the lives of businesses and individuals. I’ve been fortunate to be party to and have a impact on many ground breaking events and projects - from Orion, the worlds first private satellite venture, and Microtel, the UK DCS1800 licencee that eventually became Orange, to supporting 3G licence deployment and the development of 3D graphics for mobile phones.

Over that period, it was clear from an early stage that the personal nature of the mobile device, sustained and supported by dramatic advances in silicon technology and power consumption would see the mobile phone become the ubiquitous, central support of life in the information society that we see today. The potential for the device to inform, entertain and support levels of communications that humanity desires reached a defining point with the launch of the Apple iPhone in 2007. For the first time, the world saw in a single device, a truly accessible, high performance mobile internet experience that does justice to the connectivity infrastructure operators have spent two decades and billions of dollars installing worldwide.

What is even more significant, however, is the change the iPhone paradigm is enabling both within the mobile phone industry and, increasingly, in the wider media world. With the introduction of the iPad, the tablet has been established as a mass market device for both consumers and businesses. Within twelve months, this new form factor has already changed consumption behaviour and is now influencing business process design.

2011 will be the year of the internet connected TV. With broadband connectivity capable to delivering broadcast TV now reaching critical mass in many countries, and the service widget access paradigm showing the manner in which to provide the mass market with intuitive access to the services and content they seek, broadcasters and device manufacturers are poised to initiate the biggest change in the nature of TV based entertainment in fifty years of broadcasting.

Regardless of how successful initial propositions from Sony, Google, Samsung, Netflix etc are, telecoms and media convergence has truly arrived. The relationships between players in the value chain and between industry participants and consumers will never be the same again.

With humility, I am pleased to note that I have been among the first to observe many of the changes we have seen in the industry leading up to this point. Over the coming months and years, I hope to share my observations on this ever evolving market, and the implications for the players in that market through this site and through twitter at @caruventures.

Author

Mike Grant has a long track record of successfully predicting major industry change. He identified the rise of the mobile as a personal entertainment device 5 years before the smartphone and 10 years before the iPhone, He anticipated the growth of Apple as a major power in mobile early in 1997, and the merger of Nokia and Microsoft two years in advance of the transaction. Follow Mike on Twitter @caruventures to receive this blog.